Nigerians who enjoy drinking might have reason to be worried as the new excise duty is about to take off.
The new excise duty for alcoholic beverages and cigarette earlier
approved by President Muhammadu Buhari will take effect from today,
finance minister, Kemi Adeosun said.
Under the new rates for tobacco, each stick of cigarette will attract
one naira specific rate per stick; that is N20 per pack of 20 sticks in
2018. In 2019, tobacco will attract two naira tax per stick or N40 per
pack of 20 sticks.
By 2020, tobacco tax will even go higher, as it wlll attract N2.90 kobo per stick or N58 per pack of 20 sticks.
Despite the increases, Adeosun explained that Nigeria’s cumulative
specific excise duty rate for tobacco is still comparatively lower than
obtained in some African countries.
It is 23.2 per cent of the price of the most sold brand as against
38.14 per cent in Algeria, 36.52 per cent in South Africa and 30 per
cent in Gambia.
Adeosun also said that the new specific excise duty rate for
alcoholic beverages cut across beer and stout, wines and spirits for the
three years, 2018 to 2020.
Under the new regime, beer and stout will attract 0.30k per centilitre (Cl) in 2018 and 0.35k per Cl each in 2019 and 2020.
Wines will attract N1.25k per Cl in 2018 and N1.50k per Cl each in
2019 and 2020, while N1.50k per Cl was approved for spirits in 2018,
N1.75k per Cl in 2019 and N2 per Cl in 2020.
The Director-General, Consumer Protection Council (CPC), Mr Babatunde
Irukera, said the decision to increase the excise duty on these
commodities was consistent with prevailing global practices.
The News Agency of Nigeria (NAN) recalls that Adeosun in March had
announced a 90-day grace period to manufacturers of the products.
The grace period was granted by President Buhari.
Adeosun said the new excise duty rates would spread over a three-year
period from 2018 to 2020 in order to moderate the impact on prices of
the products.
According to her, the upward review of the excise duty rates for
alcoholic beverages and tobacco was to raise the government’s fiscal
revenues.
She said that it would also reduce the health hazards associated with tobacco-related diseases and alcohol abuse.
Adeosun said the new duty rate on tobacco was a combination of the
existing ad-valorem base rate and specific rate while the ad-valorem
rate was replaced with a specific rate for alcoholic beverages.
He said he was convinced government’s approach would foster consumer
confidence, provide regulatory clarity and prioritise safety, to
reinforce the mandate of the council.
Also, Akinbode Oluwafemi, the Deputy Executive Director,
Environmental Rights Action of Earth Nigeria, described the decision to
increase excise duty on tobacco as praise-worthy.
“We applaud the federal government for making tobacco products priced
beyond the reach of our kids and the poor who are unfortunately
targeted by the tobacco industry through their cheap but lethal
products.
“Considering the looming tobacco menace in Nigeria, it is necessary
to take stringent measures to halt the deliberate marketing of tobacco
products to kids,” Oluwafemi said.
However, the President, Manufacturers Association of Nigeria, Dr
Frank Jacobs, expressed fear that the proposed hike may lead to closure
of factories and loss of jobs in the country.
NAN also recalls that the ECOWAS Council of Ministers had at its 62nd
and 79th Ordinary Sessions in Abuja in May 2009 and December 2017,
issued directives on the harmonisation of the ECOWAS Member States’
Legislations on Excise Duties.
Similarly, the International Monetary Fund (IMF) in its 2017 mission
report advised Nigeria to raise the excise duty on a stick of cigarette
to N5, which is five times the approved amount.
“The low tax level prevails even though Nigeria is the highest
alcohol drinking country in Africa and leads the top 10 largest beer
drinking countries,” the Fund said.
The new rates also fall short of the more aggressive recommendations
of the World Health Organisation (WHO) in Article 6 of the Framework
Convention on Tobacco Control (FCTC), which suggests 70 per cent excise
on tobacco products.
-NAN

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Title : FG Raises Taxes On Cigarette And AlcoholDescription : Nigerians who enjoy drinking might have reason to be worried as the new excise duty is about to take off. The new excise duty for alcoho...Rating : 5